(NewsNation) — A new report found evidence that shows high corporate profits have driven more than half of the inflation Americans have seen during the second and third quarters of 2023.
The report, compiled by the think tank Groundwork Collective, found corporate profits accounted for more than 53% of inflation from April to September 2023. The report revealed that profits drove just 11% of growth in the 40 years before the pandemic.
Additionally, consumer prices rose by 3.4% over the past year, but input costs for producers increased by just 1%.
Corporate profits as a share of national income have increased by 29% since the start of the pandemic. While the U.S. economy has returned to or surpassed pre-pandemic levels, workers’ share of corporate income has not recovered, the report found.
“It’s one thing for corporations to pass reasonable increased costs to consumers. It’s another for them to line their coffers by exploiting Americans who are just trying to get by,” said Liz Pancotti, strategic advisor for Groundwork and a co-author of the report. “It’s time to rein in corporate price gouging – or families will continue to pay the price.”
The report notes that in 2021, prices rose as labor costs increased and supply chain shocks from the pandemic and the Ukraine war impacted shipping traffic and left energy supplies in question.
Additionally, nearly 60% of the drop in key goods and services was driven by large declines in energy costs such as jet fuel and diesel fuel. Transportation and warehousing costs have fallen by nearly 4% since June 2022 peaks.
Yet prices remain high as consumers still pay about 25% more for groceries and 21% more on housing costs, for example.
The authors’ calculations were based on data from the Bureau of Economic Analysis and National Income and Products Accounts.